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Readers Like Amazon Prime

December 14, 2016 Featured, Retail No Comments
Papa Fabarre's restaurant was in the downtown Famous-Barr for decades, it closed in 2011 when Macy's downsized in a failed effort to remain viable. Macy's closed in 2013
Papa Fabarre’s restaurant was in the downtown Famous-Barr for decades, it closed in 2011 when Macy’s downsized in a failed effort to remain viable. Macy’s closed in 2013

We can’t draw any definitive conclusions from the recent non-scientific Sunday Poll, but it’s clear from other data that Amazon Prime is a hit. From July:

Amazon Prime members now make up more than half the online retailer’s customer base, according to a new study.

Consumer Intelligence Research Partners estimates that Amazon  counts 63 million Prime members among its shoppers—an increase of 19 million from last June. (Fortune)

As I posted Monday, retailing continues to change. A century ago the Sears catalog was a big deal, offering everything you could imagine — including house kits. The Sears mail order catalog began in 1888, Montgomery Ward was earlier: 1872. National & regional retail stores survived the mail order catalog revolution and all the many changes since.  Retailers that survive must adapt & change with the times. Can you imagine a retailer not accepting credit cards? Even ALDI had to change and accept more than just debit cards.

The recent poll results:

Q: Are you currently a paid member of any of the following (check all that apply):

  1. Amazon Prime 24 [36.92%]
  2. Sam’s Club 18 [27.69%]
  3. Costco 12 [18.46%]
  4. Not a member of any 11 [16.92%]
  5. Google Express 0 [0%]
  6. Walmart Shipping Pass 0 [0%]

I’ve been an Amazon Prime member for at least 5 years now. While it costs $99, it allows me to order things without concern for the shipping cost. We order often enough that it is a good value, we occasionally watch videos too. In July 2015 we joined Costco, shopping there once per month since. Last month we got a 16.6 cu ft upright freezer (yes, Energy Star rated) so we’ll be buying even more there.

While Costco is debating the best approach to e-commerce, its competitors are acting fast. Amazon continues to open dozens of warehouses a year to accelerate shipping times. Its Prime membership program may now be Costco’s closest competitor, as Prime offers a number of perks including free two-day shipping for a $99 annual fee. There is significant overlap between Prime and Costco members, but that could change if consumers find themselves shopping on Amazon more than Costco.

Wal-Mart (NYSE: WMT) has also been rapidly expanding its grocery pick-up program, with plans to have about 1,000 kiosks in store parking lots by the end of next year. Management has said the program has been very popular. The company also acquired Jet.com for $3.3 billion to advance its own e-commerce operations.

In addition, Kroger has implemented a similar click-and-collect grocery program that allows customers to order on their phones and pick up in groceries in a store parking lot. (USA Today)

Locally owned retailers will continue to need to stay relevant to survive & thrive.

— Steve Patterson

 

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